3SOF

1. Profile

On2 Technologies, Inc. (ONT) operates as a video compression technology firm. It develops a proprietary technology platform and video compression/decompression (codec) software to deliver video to closed area networks, such as set-top boxes, Internet, and wireless devices.(complete profile here)

2. Technical Analysis
2.1. All History Chart



ONT is one of those dead corps of the tech bubble debacle. I tend to like this kind of stocks now that a new bull market in technology is unfolding.

2.2. Medium Term Chart



I see a pattern of higher lows and higher highs since 2005. Also there was a golden cross about a month ago (the 50 days moving average crossed above the 200 days SMA).

2.3. Short Term Chart



The short term trend is bullish. I sure like the technical picture, let's check the fundamentals.

3. Fundamental Analysis
3.1. Number of Shares Outstanding



This company has been living from issuing and selling shares. I see heavy dilution not just every year, but every month. A bit less dilution in 2006, though.

The current market cap is 101,199,303*$1.09 = $110.3 M.

3.2. Liquidity



The current ratio stands at 5.24, the company doesn't have a short term liquidity problem, with about $4.6 M in cash.

3.3. Revenues



Revenues were incipient until 2005. But in 2006 they're growing quite strongly from 2005 levels as you can see on the graph above. I can clearly see revenues increasing even on a quarter by quarter basis. For Q1 I have $1.217 M, for Q2 $1.535 M and for Q3 2006 I have $1.703 M. If ONT makes, say, $1.9 M in revs in the 4th quarter, it will show full year revenues of $6.355 M.

Still, the revenue multiple would be an excessive $110.3 M/$6.355 M = 17. Excessive? It depends on the gross and net profit margins.

I see, for DIVX gross margin is 92% and net profit margin is 20%. This is very high. By the way, DIVX's revenue multiple is 15.

3.4. Profits



The company lost big bucks over the last seven years.

4. General Overview

I can understand the recent tick up in the stock, revenues are growing a lot from a very small base. DIVX is the leader in this video compression industry and probably ONT is its closest competitor.

These two companies are still so small in revenue terms. But their gross and net income margins (well, ONT is still losing money) perhaps justify the extremely high revenue multiples.

They look like a biotech or software wonder.

You have to believe the online video mania to buy ONT. Do I believe video will be the way of communication of the future? I do.

Damn it, I should have made this analysis earlier, the stock is up 12% today

Despite all the financial problems this company had, the market always looks to the future, and $110 M doesn't look like a very high price to pay to be involved in the current "go video" global trend. Also, the quarterly tick up in revenues might be saying ONT's time is arriving.

Good luck

This analysis was conducted by David Randolph from the 3 Stocks on Fire Team. If you would like to receive our newsletter with free analysis and join our 8,000 plus stock speculators community, please register.

Thx for the analysis David!


Don't know what the value of this is, just posting it!



Thursday, December 28, 2006
On2 Technologies A must Own for 2007

On2 Technologies Inc. (AMEX:ONT) $1.18 per share This is the Stock to own for 2007

1).
NEWS: New Analyst Rating: 12/28/06 ThinkEquity initiated On2 Technologies
(AMEX:ONT) with a Buy rating and $1.40 fair value Target, Believes that On2 will capitalize on its continued success in Flash, also noting that Adobe Systems (NASDAQ:ADBE) licenses the company video codec in its Flash player 8.

2). RUMOR:
Adobe to buy On2 Technology

When Adobe Chief Executive Bruce Chizen picked up Flash developer Macromedia for $3.4 billion in stock last year, its latest version--Flash 8--was just launching. The update pledged much-higher-quality video than previous editions, thanks to a new movie-compression method from a small company called On2. What followed was a deluge of interest, pushing Flash ahead of video-streaming pioneers RealNetworks and QuickTime-developer Apple Computer.

On2 Technology literally revolutionized video streaming on the web, providing the core technology of YouTube and other burgeoning video streaming services.
Furthermore, On2 has serious potential. It can easily expand its license profit by applying the superior technology to VoIP, mobile movie service and other numerous services.

3).
FACTS:
The Flash 8 platform has grown faster than any other software in history.

According to Adobe-Macromedia figures, in less than one year Flash version 8 has been seamlessly installed onto nearly 90% of the 725 million personal computers worldwide. And Flash 8's new built-in video is such an improvement over earlier versions that Flash has quickly surpassed usage of both QuickTime and RealPlayer to become the fastest-growing video format on the web, "instant-on" and reliably easy to use. The Flash 8 player is operating-system independent (Windows/Vista, Macintosh, Linux) and has also recently eclipsed distribution of Microsoft's Windows Media Player. The upgraded Flash 8 video capabilities, built using the VP6 codec from On2 Technologies, achieve impressive advances in both picture quality and file size, giving both better video fidelity as well as lower bandwidth usage. Websites across the net (Yahoo!, MySpace, ABC, NBC, MTV, Nike, CNET, Comcast, to name a few) are moving quickly to adopt Flash 8 as their video format of choice. And now Flash version 9 is out, which supports the same video as Flash 8, but runs even faster and more securely.
So what's the best way to get your video into Flash 8/9 format?

There are two major options. The first is to buy Flash Professional 8 from Adobe. This product sells for $699 and includes not only the ability to encode video but also a sophisticated development environment for the entire Flash programming language. If you need to both create video plus develop Flash applications, then this is the industry standard and best all-around option. Ironically though, despite the price, Adobe's Flash Pro package doesn't produce the best-possible quality Flash 8 video. That's because it is only able to do "one-pass" encoding, where your video content is studied only once "on the fly" as it is being processed. There are also fewer available video controls and features generally, though the Flash programming side of the product is very complete.
For video, a better choice on price, quality, and features - from the people who invented it.

So what's the second option? Well On2, the company that owns the VP6 technology that powers Flash 8 video, offers its own line of easy-to-use "Flix" products that focus solely on producing the very best video possible for Flash. These applications do more than the encoder that Adobe has, yet cost a fraction of the price. Their most popular product is Flix Pro 8, which costs $249, supports both Windows and Mac, can generate both Flash 8/9 video as well as the older Flash MX/7 format, and can perform two-pass encoding for the best possible output, plus a host of other features and functions, including support for cropping, cue points, alpha channel, batch encoding, chroma key (greenscreen), filters, and automatic code and player creation. There is also a lower-priced Flix Standard edition with a minimal level of features for more rudimentary Flash video output and support, as well as the handy Flix Exporter plugin ($199) which allows you to edit video using your favorite QuickTime-enabled application - such as Apple Final Cut, Quicktime Pro, or Adobe After Effects - but then export the results directly to the highest-quality 2-pass Flash VP6 video. All Flix video plays on all platforms and browsers, works without a streaming server, and streams through firewalls.
Is it "live" or is it...?

All On2 Flix products will convert virtually all types of video, audio, and image files (e.g., wmv, avi, asf, mov, qt, mp4, mpeg, mpg, 3gp, dv, jpg, gif, png, bmp, mp3, wma, etc.) into Flash format (flv or swf). But what if you want to produce live Flash 8 video, instead of prerecorded? Long-anticipated by the Flash community, On2 has in fact just announced the only product of its kind that can accomplish this. Using On2 Flix Live in conjunction with Adobe's Flash Media Server 2, you can now encode and webcast live video to millions of viewers in high-quality VP6 for Flash. Flix Live will stream live video from webcams, DV cameras, and a variety of capture cards and devices, with nothing extra needed on the receiving end - 650 million users around the world can already instantly watch it. And, as with other Flix products, you'll be using up to 40% less bandwidth than with earlier versions of Flash video, and no Flash programming experience is required.
How about if you want to integrate Flash 8 video encoding directly into your website or product?

Well, the only way to do that is once again to turn to On2... You need one of their Flix Software Development Kits (SDKs). For Flash 8 video, there is no other place on earth you can buy these types of products. There are currently three of them:

1. Flix Engine SDK - The server-based encoding workhorse for integration with most sites and systems, supporting many platforms and programming languages with a rich API.
2. Flix SDK for DirectShow - Allows you to build Flash 8 video capabilities directly into your DirectShow-enabled Windows application. Also supports Live encoding and streaming.
3. Flix Publisher SDK - Just out, this new toolkit gives users of your site the ability to easily encode and upload any video entirely within their browsers, with no transcoding servers required.

(Note that these solutions are not available for online purchase; instead interested customers should contact On2 directly using one of the links above for the product of interest.)

Customer Testimonials

"On2 Flix Pro 8 makes adding high-quality video to your website or any digital application simple, quick, and affordable." -- 4.5 Star Review from Layers Magazine.

"Flash 8's new video codec technology is nothing short of phenomenal." -- InformIT.com.

"We're super excited to be using Flash 8 codec this year. We think it's an amazing upgrade to Flash video and we're extremely pleased with the results." -- Sundance Film Festival Online.

2007 Expect XM Satellite Radio and On2 Technologies in-vehicle satellite video to rollout (This will be big for ONT) solutions designed to receive audio and video entertainment from XM. Video content can be either streamed live or stored for later playback.

"Considering the Potential I'd say ONT is a Must own stock the upside could be 5X the current share price"

Richard Watts CA press Bureau member.
Private Investment Club Manager.


http://on2-the-stock-for-2007.blogspot.com/

Se7en

Thanks. Most of that info looks correct...they just took it from other sources and copied it on one page...I am very careful with any info from Blogs...especially Blogspot since their Blogs are free to anyone in the world. Many stock scammers will pump stocks through these blogs.

The only Blogs I read are usually listed on http://www.tradermike.net/ these are all hand picked and approved by a pro trader.

Go (((ONT))) to bad we have to wait till Wednesday 

Why On2 over H.264:

For the Flash Player 8, Macromedia needed a state-of-the-art video codec to sustein the adoption of
the Flash Player as the ideal video delivery platform. The choice fallen on On2's VP6. You may ask
why did Macromedia chosen a proprietary technology instead of H.264. The reason is clear. H.264
must be licensed by paying expensive royalties to two patent pools, MPEG LA and VIA Licensing.
As a result, the costs of deploying H.264 are very high. Under the MPEG LA terms, in larger
deployments encoder and decoder fees are $0.20 per unit up to five million units (beyond the price
is $0.10). There are also content-based fees. The cap for these fees is $3.5 million (per firm) in 2005
and 2006, $4.25 million in 2007 and 2008 and $5 million in 2009 and 2010.
Under the terms of the VIA License, in larger deployments, encoder and decoder fees are $0.25 per
unit, as well as content fees. As an annual cap on content fees, non-PC OEMs pay $2.5 million a
year and PC OEMs pay $4 million.These royalty are only for the intellectual property licenses and not for a working codec, thus to this
cost we must add the cost of developing an efficient H.264 compliant codec.
The choice of VP6, which is royalty-free, has permitted Macromedia to avoid the payment of several
million dollars in fees.

VP6 vs H.264 and Conclusions
For what we have said, it is clear that VP6 is much simplier than H.264. And this is its main
advantage. VP6 requires less complessity both in decoding and encoding stage. Therefore the codec is also considerably smaller.
Being simplier than H.264, how can VP6 obtain encoding performance comparable to it ?
We must consider that VP6 uses fewer but efficient encoding techniques. A mix of adaptive subpixel
motion estimation, better prediction of low-order frequency coefficients, improved quantization
strategy, de-blocking and de-ringing filters or enhanced context based entropy coding, produces
compressed movies with a very good "perceptual" quality.
Furthermore, we have already described the difference between a codec technology and a codec
implementation. H.264 has a lot of modes, options and annexs, and to built an efficient encoder is
quite difficult. VP6 is probably technically less advanced than H.264 but On2 has produced a quite
efficient and compact implementation.

http://www.progettosinergia.com/flashvideo/FlashVideoTechnology.pdf

More DD:

http://www.blip.tv

Blip.tv is a popular video sharing site, using Flix Engine to upload, encode and publish your own videos

http://www.camtix.com

Camtix is the first desktop application allowing people to publish streaming videos to community-based websites to create Flash 8 video blogs, video galleries etc

http://www.daum.net

Daum is the second popular web portal in South Korea. They licensed On2 Flix Engine for Linux for its newly-launched consumer video blogging and personal web publishing community.

http://www.ifilm.com/uservideo?htv=12


Ifilm.com, one of the top 10 streaming media websites in the world, featuring programming from Hollywood studios, amateur filmmakers and user-generated content. Ifilm is using On2 Flix engine to encode content in Flash 8.

http://www.mncast.com

MNCast.com This Korean website leverages the On2 Flix Engine for its browser-based video publishing service. MNCast is well positioned to become the premiere online community for consumers throughout Korea to share high quality Flash 8 video.

http://www.nowpublic.com

Nowpublic.com A news blog where you can share news enriched with photos and videos. Videos are published using Flix Engine.

http://www.videoegg.com

Videoegg.com VideoEgg is a web-based publishing service, build upon On2 flix engine, that allows users to capture video content from virtually any device and format and publish it to the web.

http://www.vidiac.com/upload.aspx#blogs

Vidiac allows you to create your own internet tv channel, where users can upload and watch videos. By now, Vidiac.com streams almost 1 million videos a day.

http://www.vimeo.com

One of the most popular video sharing sites on the web. They switched from Quicktime to Flash 8 format and are using On2 Flix Engine to transcode their videos.

http://www.whirrl.com

Whirrl.com Using Whirrl you can create your own video weblog and either record a video post using your webcam or post a previously recorded video for all to see.

I found one that seems interesting...not sure if they are using (ONT).

http://www.stickam.com

http://www.stickam.com/about/company.do

This video concept is really growing.

COXnet Licenses On2 Technologies Flash Video Encoding Solutions for Cox Newspapers
Tuesday January 2, 7:51 am ET
COXnet Selects On2 Flix Engine and On2 Flix Publisher to Streamline Flash Video Encoding Workflow

TARRYTOWN, N.Y., Jan. 2 /PRNewswire-FirstCall/ -- On2 Technologies, Inc. (Amex: ONT - News) announced today that COXnet has selected On2's Flix Engine and Flix Publisher to enable encoding and delivery of high-quality On2 VP6 for Flash video to its family of Cox Newspapers properties. On2 VP6 is the advanced video format used in Adobe Flash Player.

ADVERTISEMENT
As a result of the licensing agreement, COXnet will integrate the On2 Flix Engine and On2 Flix Publisher solutions into its newspaper's web sites, enabling them to encode and publish news content in the On2 VP6 for Flash format. The combination of On2 Flix Engine with On2 Flix Publisher also significantly streamlines the encoding workflow for Cox Newspapers, by reducing the amount of time that it takes them to encode source material directly from the field to the web sites.

"COXnet is embracing a new encoding workflow paradigm that lets them encode and deliver high-quality Flash video directly from their news sources in the field to the web," said Mike Savello, senior vice president of global sales, On2 Technologies. "The On2 Flix Engine and On2 Flix Publisher are providing COXnet with a unique ability to streamline the encoding workflow, and reducing the amount of time it takes them to create a real-time, breaking news experience on their web sites using Flash video."

The On2 Flix encoding software works in network environments to automatically convert and publish virtually any video to On2 VP6 for Flash format. Programmers can customize encoding applications using standard API's On2 publishes, making the On2 Flix Engine and On2 Flix Publisher highly flexible for any Flash encoding environment. Flash video enables media publishers to reach the widest possible audience via the Adobe Flash Player, which is installed on 98% of desktop computers globally.

About On2 Technologies, Inc.

On2 Technologies (Amex: ONT - News) is a leading technology firm at the forefront of digital video compression. The company revolutionized digital media delivery with the creation of its advanced full-motion, full-screen On2 Video compression and streaming technologies. On2 Video codecs are widely used in the Internet, video-on-demand, VoIP, and mobile media markets. On2's software is used by such leading global companies as Adobe/Macromedia, AOL, Skype, XM Satellite Radio, Sony, CTTNet, VitalStream, and Tencent. Located in Tarrytown, NY, the company has an R&D offices in Clifton Park, NY, and Cambridge, UK. To contact On2, write to [email protected] or visit http://www.on2.com.

ABOUT COX NEWSPAPERS

As one of the nation's largest newspaper publishing enterprises, Cox Newspapers now produces 17 daily and 25 non-dailies. The company also operates direct mail businesses, distributes classified advertising publications, customized newsletters and owns one-third of a newsprint manufacturing business. Total circulation for the company's newspapers reaches 1.2 million each weekday and more than 1.6 million on Sundays. The company also operates direct mail businesses, distributes classified advertising publications, customized newsletters and owns one-third of a newsprint manufacturing business. For more information about Cox Newspapers, Inc, please visit http://www.coxnews.com.

Trademarks mentioned in this release are property of their respective owners.


http://biz.yahoo.com/prnews/070102/nytu048.html?.v=81

Deja vu-

Reminds me of PTSC when it took off

Companies realize flash is the future and are starting to jump on the bandwagon, I think we see many more of these Pr's leading up to earnings with blowout numbers.

Check out Digital Max

http://www.cox.com/coxcareer/career_mktg.asp

You Witness News:

http://news.yahoo.com/you-witness-news

Video Paste

http://www.videopaste.com/

Come on boatguy...."many PRs leading to blowout numbers"

Be realistic amigo......ONT has never made more that $2M/Quarter and it currently trades at un unbelievably high 20+ P/S....and it has never made a single penny in profit. The potential has always been there but ONT has always been a perennial loser

http://finance.yahoo.com/q/is?s=ONT

Are you telling me that a few PR's will make it go from less than $2M/quarter to over $10M/Q instantly??...do you know the size of those deals?...do you know when they recognize revenues?...do you know the profit margins on those deals??

The balance sheet is very poor. In fact, ONT is in violation of the minimum $2.5M stockholders equity required by Nasdaq. If Nasdaq notices that, they get a delisting  notice right away.

http://finance.yahoo.com/q/bs?s=ONT

Sounds like a lot of mindless pumping to me.

Ray,

I see similarities to PTSC in that they have Intellectual property that is about to become very valuable as the video format wars appears to have been won by Flash.

"When Adobe Chief Executive Bruce Chizen picked up Flash developer Macromedia  (nasdaq: MACR -  news  -  people ) for $3.4 billion in stock last year, its latest version--Flash 8--was just launching. The update pledged much-higher-quality video than previous editions, thanks to a new movie-compression method from a small company called On2. What followed was a deluge of interest, pushing Flash ahead of video-streaming pioneers RealNetworks  (nasdaq: RNWK -  news  -  people ) and QuickTime-developer Apple Computer  (nasdaq: AAPL -  news  -  people ).

"Probably six months after that new [compression technology] came out, adoption started going through the roof," says Chris Hock, group product manager of Adobe's media platform. Microsoft's (nasdaq: MSFT - news - people ) Windows Media format still dominated the market with a 60% share of all video streams last year. But Flash has quickly jumped into second place with a 19% market share, up from nothing two years ago, and will grow substantially this year, according to Accustream research director Paul Palumbo."



Many of us here were in PTSC in the teens before it went up 1500%+. They also had many licensing deals for their IP before announcing a cash dividend with no warning.

I guess we will find out shortly

Good Luck

Im in at 1.22...............Video is hot and so is CES in Vegas.

News:

On2 Tech to show innovations in HighDef, Satellite, Mobile Video

Video technology leader to unveil solutions for high definition video and on- demand, broadcast, Web 2.0 and Social Networking video for TV, PC and mobile applications
(Full text of a statement. Contact details below.)

New York (ANTARA News/PRNewswire-AsiaNet) - On2 Technologies, Inc., (Amex: ONT), a leader in video compression software and solutions, announced today that it will showcase new high definition and cross-platform video technologies at the upcoming International CES show in Las Vegas from January 8-11, 2007.

The new showcase is based on On2's industry leading TrueMotion(R) VP6 and VP7 codecs, and addresses emerging consumer market applications for video-on- demand, broadcast, user generated content, and commercial applications such as digital video signage. Building on the success of On2's VP6 for Adobe(R) Flash(R) 8 video, On2 is addressing the growing market of video across different bandwidth-constrained networks and mass-market devices, for fixed and mobile video.

High Definition Video: On2 will demonstrate high definition video playback based on its latest award winning TrueMotion VP7 compression technology at data rates as low as 2Mbps, allowing greater penetration of high definition video across low cost devices and existing networks for on-demand, broadcast and other streaming applications.

Mobile Video: On2 will demonstrate TrueMobile(R), its VP7 based mobile video system for reaching the largest number of handsets across the most networks, including2.5G, 3G and 4G networks . TrueMobile offers the most efficient and affordable mobile video solution for carriers and media companies at data rates as low as 20kbps, and with an over-the-air upgrade to convert most popular data-enabled phones to TrueMobile video phones.

Internet Video for TV and Mobile: On2's transcoding and playback solutions will be used to demonstrate how popular web video content can be played back on any device -- TV, PC, and mobile phones -- for true cross- platform applications. Social Networking and User-Generated Content (UGC) can be accessed on TVs and mobile phones, in addition to PCs.

The showcase will also feature On2 VP6 based Flash 8 playback on C2 Micro's Jazz2 processor and Texas Instruments' DaVinci platform. These embedded platforms allow popular Flash 8 video web content based on On2 VP6 to be purposed for TV viewing with affordable CE devices and set-top boxes.

Satellite Video: On2 will join XM Satellite in demonstrating VP7 based satellite delivered video to XM Satellite devices.

The demonstration can be seen at the On2 booth and XM Satellite's booth.

"Our technology showcase at CES represents significant breakthroughs in video compression and its application in cutting-edge market trends such as user generated content and mobile video," said Bill Joll, president and CEO of On2 Technologies. "We are showcasing these because of major customer initiatives behind these solutions, and we expect important consumer electronics products to ship in 2007, as a result."

On2's booth is located in the Anytime/Anywhere Technology Zone at the Sands Convention Center, booth # 69628. Executives from On2 will be available to meet at the booth. To schedule meetings in advanced, please contact [email protected].

http://www.antara.co.id/en/seenws/?id=25485

Up pre-market

We may see new highs today!

Jumped ship on this one, I'm no friend of gap ups specially when the MM is playing tricks along. Out at 1.32
Best of luck boatguy.